August Core Inflation Indicators Show Divergence in U.S.

According to BlockBeats, Wall Street Journal journalist Nick Timiraos, known as the 'Fed's mouthpiece,' shared insights on social media regarding the divergence between core PCE and core CPI inflation indicators. In August, several high-weight categories in the PCE index experienced significant price declines, creating a larger gap between core PCE and core CPI. Analysts, using CPI and PPI data to forecast PCE, anticipate that the Federal Reserve's preferred core inflation measure rose by approximately 0.20% month-over-month, compared to a 0.35% increase in CPI. This suggests that the annual rate will remain at 2.9%. Notably, core goods prices within the PCE index are expected to have decreased in August, contrasting with an increase in the CPI. Overall prices are projected to rise by 0.24% month-over-month, pushing the annual rate to 2.7%.